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03-29-2009, 03:26 PM
By David PearsonOf DOW JONES NEWSWIRES PARIS (Dow Jones)--PSA Peugeot-Citroen (UG.FR), said Sunday it has fired its chief executive, Christian Streiff, and is replacing him with Philippe Varin, a steel executive with a track record of turning around ailing companies, who oversaw the merger of Corus (formerly British Steel) and Tata Steel in 2007.
Peugeot-Citroen, Europe's second largest car maker by volume, quoted the head of its supervisory board, Thierry Peugeot, as saying in a statement that its board had decided unanimously to terminate Streiff's contract "as the exceptional difficulties facing the automobile industry require a change of management at the head of the group."
Varin, 56, has spent most of his career at Corus and at Pechiney, a French aluminum producer that was taken over by Canada's Alcan in 2003.
Varin was called in to resuscitate near-bankrupt Corus in April of 2003 and nursed it back to profitability thanks to cost-cutting and refinancing efforts. Corus was sold to Tata Steel in 2007, and Tata asked him to stay on to supervise the merger.
"Streiff's departure is unlikely to be mourned by investors," commented Stuart Pearson, automotive analyst at Credit Suisse. "Uncertainty and speculation has continued to surround the CEO role for the past year, with question marks surrounding both Streiff's CAP2010 strategy for the group, and since his health issues in summer 2008," he noted.
Streiff suffered two minor strokes last year that forced him to ease up on his workload at a critical time for Peugeot-Citroen, as it entered the biggest slump in the automobile industry since the Second World War.
Streiff has been getting bad press in recent months, with recurrent reports that the Peugeot family, which controls nearly 45% of the company's voting rights, was becoming irritated by Streiff's go-it-alone management style and his strategy. Streiff replaced Jean-Martin Folz in the spring of 2007, after a brief stint as head of the European commercial aircraft builder Airbus.
Streiff brought in other senior executives when he arrived in 2007, notably the chief financial officer, Isabel Marey-Semper, and it's likely that there will be other senior management changes after Streiff's departure, analysts said.
Peugeot-Citroen said Varin will take over the CEO mantle on June 1, but will join the auto maker on April 15 to start familiarizing himself with the company and its business sector.
Like other volume automobile companies, Peugeot-Citroen has been pummeled by the collapse of vehicle sales in the wake of the global financial crisis. The company posted a loss of EUR343 million in 2008 after a profit of EUR885 million in 2007, and Streiff has acknowledged that the company will remain in the red this year.
Credit Suisse's Pearson predicted that Peugeot-Citroen's share price should respond positively to the news of Streiff's departure. Pearson has an outperform rating on the stock, with a target price of EUR18.
http://online.wsj.com/article/BT-CO-20090329-703058.html
Peugeot-Citroen, Europe's second largest car maker by volume, quoted the head of its supervisory board, Thierry Peugeot, as saying in a statement that its board had decided unanimously to terminate Streiff's contract "as the exceptional difficulties facing the automobile industry require a change of management at the head of the group."
Varin, 56, has spent most of his career at Corus and at Pechiney, a French aluminum producer that was taken over by Canada's Alcan in 2003.
Varin was called in to resuscitate near-bankrupt Corus in April of 2003 and nursed it back to profitability thanks to cost-cutting and refinancing efforts. Corus was sold to Tata Steel in 2007, and Tata asked him to stay on to supervise the merger.
"Streiff's departure is unlikely to be mourned by investors," commented Stuart Pearson, automotive analyst at Credit Suisse. "Uncertainty and speculation has continued to surround the CEO role for the past year, with question marks surrounding both Streiff's CAP2010 strategy for the group, and since his health issues in summer 2008," he noted.
Streiff suffered two minor strokes last year that forced him to ease up on his workload at a critical time for Peugeot-Citroen, as it entered the biggest slump in the automobile industry since the Second World War.
Streiff has been getting bad press in recent months, with recurrent reports that the Peugeot family, which controls nearly 45% of the company's voting rights, was becoming irritated by Streiff's go-it-alone management style and his strategy. Streiff replaced Jean-Martin Folz in the spring of 2007, after a brief stint as head of the European commercial aircraft builder Airbus.
Streiff brought in other senior executives when he arrived in 2007, notably the chief financial officer, Isabel Marey-Semper, and it's likely that there will be other senior management changes after Streiff's departure, analysts said.
Peugeot-Citroen said Varin will take over the CEO mantle on June 1, but will join the auto maker on April 15 to start familiarizing himself with the company and its business sector.
Like other volume automobile companies, Peugeot-Citroen has been pummeled by the collapse of vehicle sales in the wake of the global financial crisis. The company posted a loss of EUR343 million in 2008 after a profit of EUR885 million in 2007, and Streiff has acknowledged that the company will remain in the red this year.
Credit Suisse's Pearson predicted that Peugeot-Citroen's share price should respond positively to the news of Streiff's departure. Pearson has an outperform rating on the stock, with a target price of EUR18.
http://online.wsj.com/article/BT-CO-20090329-703058.html